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- Do not copy from another source. A. TMK Bank has the following balance sheet (in millions of dollars) with the risk weights in parentheses. Assets Liabilities and Equity Cash (0%) $40 Deposits $350 Interbank deposits with AA rated banks (20%) $55 Subordinated debt (5 years) $20 Standard residential mortgages (50%) $100 Non-cumulative preference shares $15 Business loans to BB rated borrowers (100%) $210 Common equity $20 Total assets $405 Total liabilities and equity $405 In addition, TMK Bank has $40 million in performance-related standby letters of credit (SLCs) with credit conversion factor of 50%. Consider capital conservation buffer and assume that APRA suggests 1% countercyclical capital buffer due to COVID related effects. i. What is the total minimum capital required under Basel III? ii. Calculate Tier 1 CAR, Common Equity Tier 1 CAR, and Total CAR and compare them with Basel III requirements. iii. Does TMK Bank have enough capital to meet the…Listen TD Bank is considering lending money to a closely held corporation. What will TD usually insist on from the major shareholders or other principals? a personal guarantee Oa pre-emptive right a fiduciary obligation Oa negotiable instrument Oa debentureConsider the following table: Weights 25% Risk Solvenc 25% Repayme 10% Profitabilit 10% Liquidit Class y nt y y 10% Financial Efficiency 20% Collater al 1 X 2 X X 3 X 4 X 5 X Based on the above information, find the weighted average score using the single rating system. 3.5 O 2.8 O 8.2 3.8
- Charleston Credit Union has $10,000,000 in assests. The calue of owners equity ir capital is $50,000. what is a leverage ratio for the Charleston Credit Union?If you suspect that a company will go bankrupt nextyear, which would you rather hold, bonds issued bythe company or equities issued by the company? Why?1. Explain the difference between Initial Margin and Maintenance margin in stock trading.
- QUESTION THREE A. What is meant by asymmetric information? B. Z Ltd has a K1million bond issue outstanding. If deposits earn 8 percent per annum, calculate the amount that can be deposited annually to a sinking fund in order to accumulate enough money to retire the entire K1million issue at the end of 20 years. C. Mutale has just borrowed an amount of K5,000 to pay his school fees. The loan is to be repaid in equal installments at the end of each of the next 3 years and the interest rate is 15%. Mutale is interested to know the repayment implications on this loan in terms of the total amount that will be paid on the loan and the breakdown between the principal amount and interest payments over the 3 years. Draw out a table that will help Mutale understand the loan implications. D. Mubita is contemplating on investing in Stocks A and B with the following probability distributions of possible future returns: Probability (Pi) 0.1 0.2 0.4 0.2 0.1 Page 2 Stock A (%) 15 0 5 10 25 Stock B (%)…Which statement is incorrect related to financial intermediaries (institutions)? a. They are firms that specialize in financial intermediation - a process of borrowing funds from SSUs and lending such funds to the DSUs. b. The main objective of financial intermediaries is to convert savings from SSUs into investments. c. They are the biggest investors in equity securities in the PSE d. They offer the highest returns and lowest risks when compared to alternative investments available to SSUs. e. none of the above52 Weeks VOL NET HI LO SYM DIV YLD PE 100s HI LO LAST CHG 48.72 20.10 DUK 1.00 3.3 18 20925 31.55 29.40 30.20 0.56 25. Duke stock must have closed at day. a. $29.64 b. $30.76 c. $30.99 d. $32.11 per share on the previous trading
- 13. This refers to a bank who has been appointed to ensure that the bond issuer will abide with the covenants. O a. The bidding banks b. The leader of the syndicate c. The investment bank d. The trustee bank e. None of the aboveProvide a general overview of Integrated Financial Management Information System (IFMIS)Can you explain me what is the assets = capital + liabilities